10 Things You Need To Know This Morning

North Korean leader Kim
Jong Un attends the Supreme People's Assembly in Pyongyang, in
this still image taken from video released by Kyodo April 9,
2014. North Korea on Wednesday announced its leader Kim was
re-elected as First Chairman of the ruling National Defence
Commission at the meeting of its assembly.REUTERS/Kyodo

Good morning. Here's what you need to know.

Chinese trade. Chinese exports fell 6.6% from a
year earlier in March and imports tumbled 11.3%. Economists were
looking for gains of 4.8% and 3.9%, respectively. The surprise
drop in both imports and exports brought China's trade surplus to
$7.71 billion in March, well above the $1.8 billion surplus
predicted by economists. "Exports by destination show growth was
dragged down by weakness in the U.S. and Hong Kong,
highlighting the negative impact on exports of soft U.S.
demand in Q1, as well as companies' fake export reporting early
last year," say economists at Barclays. "Exports to the U.S. grew
1.2% in March and an average of 1.3% in Q1, down from 9.4% in Q4.
Exports to Hong Kong declined 43.6% in March and an average of
31.3% in Q1, down from 0.6% in Q4, likely due to distortions
caused by fake trade reporting. Meanwhile, exports to other
developed and emerging markets look more in line with
expectations."

Greek offering. Greece issued €3
billion of 5-year notes at a final yield of 4.95% this morning,
marking a return to the bond market for the first time since
before the euro crisis. "The ability
of Greece to
conduct issuance emphasizes the overwhelming strength of positive
sentiment for peripherals," say interest rate strategists at
Rabobank. "Greece still
has an extremely high debt stock — albeit much is owned by
official creditors and the average maturity is high — but the
market is instead focusing on the more positive flow
metrics)."

Euro zone consumer prices. France, the
Netherlands, and Greece all reported consumer price growth below
expectations this morning. In France, the consumer price index
advanced only 0.6% year over year in March, slowing from
February's 0.9% rate and missing expectations for a 0.7% rise. In
the Netherlands, the consumer price index rose 0.8% from a year
earlier in March, down from 1.1% in February and below estimates
for an unchanged reading. In Greece, deflation accelerated faster
than expected — the consumer price index fell 1.3% year over
year, down from February's 1.1% drop and worse than expectations
for a 1.2% price decline.

Euro zone industrial production. Industrial
production data in France and Italy, two of the euro zone's three
biggest economies, also surprised to the downside. French
industrial output rose only 0.1% in February from a month
earlier, failing to meet expectations for a 0.2% advance. Italian
industrial output fell 0.5% — economists were looking for only a
0.3% drop. "This underscores the fact that both governments
are touting a new push for growth and how this will be reconciled
with the EU demands for austerity are not yet clear," says Marc
Chandler, global head of currency strategy at Brown Brothers
Harriman. "Although in an uncoordinated fashion, a Paris-Rome
(and maybe Madrid) bloc could be coming together and, if we are
right about the EU parliamentary elections, the tide in Europe
may turn in the coming months."

Bank of England. In its monthly decision on
monetary policy, the Bank of England elected to leave its
benchmark interest rate unchanged at 0.5% and its asset purchase
target unchanged at £375 billion. "Despite some evidence from
labour market surveys pointing to strong increases in wages in
the coming months, the BoE takes comfort from the favourable
combination of sustained output growth and subdued price
pressures, and continues to act in line with its forward guidance
announced in August (at 7.2% the ILO unemployment rate is still
above the 7% threshold but is expected to decline to 6.9% in Q1
2014)," says Slavena Nazarova, an economist at Crédit Agricole.
"The exact timing of the first rate hike is uncertain but we
continue to anticipate a first rate hike in Q2 2015, in line with
markets’ expectations, followed by a very gradual pace of
tightening thereafter."

Mixed markets. In the United States,
S&P 500 futures point to a slightly negative open, while
Treasuries are getting a boost. The dollar-yen exchange rate is
down another 0.3% today following Tuesday's big sell-off, trading
near ¥101.70. The euro is up slightly against the dollar. The
London FTSE 100, the French CAC 40, and the German DAX are
advancing, while Spain's IBEX 35 and Italy's FTSE MIB are in the
red. Gold is up 1.3%, trading near $1322 an ounce.

Jobless claims. The latest weekly jobless
claims data are due out at 8:30 AM ET. Economists predict 320,000
initial claims for unemployment insurance were filed in the week
ended April 5, down from 326,000 the week before. Continuing
claims filed in the week ended March 29 are expected to have
ticked down to 2.835 million from 2.836 million.

Import prices. Monthly import prices data are
also released at 8:30 AM. Economists predict prices rose 0.2% in
March from the previous month but fell 0.9% from a year earlier
after gaining 0.9% on the month but losing 1.1% on the year in
February.

30-year auction. The U.S. Treasury will
auction $13 billion of 30-year notes at 1 PM ET. 30-year yields
are down 40 basis points this year following the Fed's decision
to unwind its large-scale asset purchase program and continue
down the path toward monetary policy
normalization. "Given the data-light calendar for the
next two weeks or so, the return of carry trades could steer
demand away from the long end and into the belly of the curve,"
say interest rate strategists at Nomura. "We expect more
concession, either outright or on the curve, heading into the
auction."

Monthly budget statement. The U.S. Treasury
releases its monthly budget statement at 2 PM ET. Economists
predict the monthly budget deficit shrank to $36 billion in March
from $106.5 billion a year earlier.